Markets & Finance

Amgen Dips on Drug Warning News

March 09, 2007

Investors sold the shares after the agency required tougher labeling on the company's Aranesp and Epogen treatments

Amgen (AMGN) was dealt a setback on Mar. 9 when the Food and Drug Administration said that the company should include more information on the labels of its anemia treatments Aranesp and Epogen, as well as Johnson & Johnson's (JNJ) Procrit offering. Investors sold the the Thousand Oaks (Calif.) biotechnology company's shares after the news.

The three drugs, which boost the number of red blood cells in the body, are used for various types of illnesses with different results. The FDA has approved their use in patients who don't have enough blood cells because of their chronic kidney failure or chemotherapy. But the drugs can't be used for symptoms of anemia, like fatigue, in cancer patients, surgical patients, or HIV cases.

Drug companies have been trying in recent years to discover more ways to use the anemia treatments, but with varying degrees of success. The FDA said researchers have shown recently that when patients with chronic kidney failure got higher than the recommended dosage of such drugs, it caused an increased risk of death. In other studies, more rapid tumor growth occurred in patients with head and neck cancer who received these higher doses. Sometimes when cancer patients received the recommended doses, an increased risk of death was reported in those not also receiving chemotherapy, the FDA said. And people who were taking the right amounts of the drug had a higher risk of blood clots after orthopedic surgery, too.

So the FDA is warning doctors to be careful about how they dose the drug. "Physicians and patients should carefully weigh the risks," against transfusion risks, the FDA said in a statement March 9.

After the news Amgen's shares fell 2.1% to $60.86 per share on the Nasdaq on Mar. 9. Johnson & Johnson (JNJ), which owns Procrit's distributor Ortho Biotech LP, gained 0.7% to $62.14 per share on the New York Stock Exchange.

It's not the first time investors have gotten nervous about Amgen, which is also battling rivals like Roche, which wants approval for a drug that would compete with anemia treatments. Investors also sold Amgen's stock on Jan. 26 after the company posted disappointing results from clinical studies involving Aranesp and another of its drugs, Vectibix (see BusinessWeek.com, 1/26/07, "Amgen Hits a Snag").